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A Matter of Time: Revisiting Growth Convergence in China

  • Andersson, Fredrik N.G.
  • Edgerton, David L.
  • Opper, Sonja

China’s unbalanced growth strategy has seemingly fostered growing inter-regional growth disparities and there is little evidence of wealth trickling down from richer provinces to poorer provinces. Standard convergence tests, however, may be ill specified to detect underlying long-term growth trends in small samples due to the pronounced and frequent inter-regional short-term fluctuations. Our paper suggests a novel approach to distinguish between these long-term growth trends and short-term fluctuations. Based on provincial data from 1978 to 2009, our results indicate that China’s provinces only diverge over the short-term. Over the long term, provinces cluster into two converging growth clubs.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 45 (2013)
Issue (Month): C ()
Pages: 239-251

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Handle: RePEc:eee:wdevel:v:45:y:2013:i:c:p:239-251
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